Sony pays $750m for Michael Jackson's share in company
- By Zhang Rui
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E-mail China.org.cn, March 16, 2016
Sony announced yesterday that it has signed a binding memorandum of understanding with the Estate of Michael Jackson to obtain full ownership of Sony/ATV Music Publishing by acquiring the 50 percent share in Sony/ATV held by the estate.
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| Sony/ATV Music Publishing joint venture. [File photo] |
The memorandum calls for a total payment of US$750 million, which includes a lump sum payment by Sony Corporation of America of approximately US$733 million, as well as distributions previously committed to by Sony/ATV to be paid to the Estate. The payment also reflects certain contractual and accounting adjustments related to the Sony/ATV joint venture and other commercial opportunities involving Sony and the Jackson estate, the statement said.
The sale is the culmination of a process that began in September 2015, when Sony exercised a right allowing one partner to purchase the other partner's interest pursuant to a procedure outlined in the Sony/ATV operating agreement.
The parties expect to execute a definitive agreement by March 31, 2016. The closing of the transaction is subject to certain closing conditions, including regulatory approvals.
"When Sony first partnered with Michael Jackson 21 years ago to create Sony/ATV Music Publishing, we knew that this company had the ability to reach great heights," said Michael Lynton, CEO of Sony Entertainment, Inc. "This acquisition will enable Sony to more quickly adapt to changes in the music publishing business, while at the same time continuing to be an unparalleled leader in the industry and a treasured home for artists and writers.”
The transaction will not affect the Jackson estate's continuing interests in other music assets, including all of Michael Jackson's master recordings and Mijac Music, the publishing company that owns every song written by Michael Jackson as well as songs by some of Jackson’s favorite songwriters and artists acquired during his lifetime. In addition, the estate will also retain its ownership interest in EMI Music Publishing.
"This transaction further allows us to continue our efforts of maximizing the value of Michael's Estate for the benefit of his children," said John Branca and John McClain, co-executors of the estate. "It also further validates Michael's foresight and genius in investing in music publishing. His ATV catalogue, purchased in 1985 for a net acquisition cost of US$41.5 million, was the cornerstone of the joint venture and, as evidenced by the value of this transaction, is considered one of the smartest investments in music history."
Sony/ATV Music Publishing, established in 1995 as a joint venture between Sony and Michael Jackson, is the world's leading music publisher. Together with EMI Music Publishing, Sony/ATV owns or administers more than 3 million copyrights, including those from such iconic music catalogs like Leiber & Stoller, Mijac Music, Motown, and Famous Music.
In a seperated statement issued to Jackson's fan base yesterday, the estate said that they "explored several options that would have positioned the Estate as the buyer rather than Sony, and we had substantial interest from potential partners to work with us in doing so. Ultimately, however, Sony's offer was in the best interest of Michael's children and we made the difficult decision to accept the offer."
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